NFIB Weekly News
NFIB Weekly News
Leading the News
Small Business Confidence Showed Slight Improvement In February.
Fox Business (3/12) reported, “Small-business owners’ confidence in the U.S. economy improved slightly in February, breaking five consecutive months of declines and rebounding from the partial government shutdown, according to the National Federation of Independent Business.” NFIB CEO Juanita Duggan is quoted saying, “Small business owners are thankful to have the government shutdown in the rear-view mirror but need more certainty about the future.”
SBET Shows Modest Improvement In February. Business Climate
The NFIB Small Business Optimism Index improved modestly in February, increasing to 101.7. Views about business conditions in the future improved, as well as perceptions of the current period as a good time to expand. The Uncertainty Index fell 1 point to 85, a small decline but still indicative of residual uncertainty from the government shutdown. NFIB President and CEO Juanita Duggan said, “Small business owners are thankful to have the government shutdown in the rearview mirror but need more certainty about the future... Small businesses put their money where their expectations are as we’ve seen when they get tax and regulatory relief. The best thing Washington can do for the small business half of the economy is to continue the policies – tax cuts and deregulation – that leave them with more resources to invest and find qualified workers.”
NFIB: Small Business Job Creation Breaks Record.
Bloomberg (3/7) reported that small businesses “added the most jobs per firm in 45 years,” according to a report released on Thursday from NFIB. The report found that “Firms each added 0.52 workers in the last month,” with 16 percent of small business owners also saying they “plan to add jobs in the next three months, down from a record 26 percent in August.”
Mnuchin: Tax Refunds Have “Normalized.”
Bloomberg (3/2, Czuczka) reported Treasury Secretary Mnuchin “said tax refunds have ‘normalized,’ pushing back against complaints that the new tax law is leaving average Americans with smaller refund checks.” His comments are “the second time within days that Mnuchin sought to explain early data and anecdotal evidence proliferating social media that refunds in the first weeks of the tax filing season are lower.” Mnuchin tweeted, “Tax refunds normalized as we expected. #TaxCuts #refunds working.”
Federal Reserve: GDP Growth For 2018 Slightly Under 3 Percent.
Reuters (2/22, Schneider) reported the Administration “will fall ‘a little under’ its target of 3 percent annual growth of gross domestic product for 2018, the Federal Reserve said Friday in a report that offers an economic scorecard of sorts for the first full year of President Donald Trump’s term.” While “growth for the year was ‘solid,’ the Fed said, gross domestic product “rose a little bit under 3 percent for the year as a whole,” shy of the pace White House officials have set as their touchstone for the success of the president’s policies.”
US Job Openings Hit Record High In December.
Reuters (2/12, Mutikani) reported that “US job openings surged to a record high in December, led by vacancies in the construction and accommodation and food services sectors, strengthening analysts’ views that the economy was running out of workers.” According to Reuters, “Job openings, a measure of labor demand, increased by 169,000 to a seasonally adjusted 7.3 million in December, the highest reading since the series started in 2000.” However, “while the release of the Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS, on Tuesday underscored labor market strength, there are worries the shortage of workers could hurt an economic expansion that has lasted 9-1/2 years and is the second longest on record.”
Market Rebound At Crossroads As Investors Face Economic Uncertainty.
The Wall Street Journal (3/17, Ramkumar, Subscription Publication) reported that last week the S&P 500 reached a five-month high – the best week for stocks since late last November – which investors say is likely to fuel further gains. However, some analysts were skeptical that the bullish tone can last given the economic uncertainty investors face amid uneven data.
Federal Rate Projections Could Show Stronger Confidence In Extended Pause. Small Business Marketing
The Wall Street Journal (3/17, Timiraos, Subscription Publication) reported Federal Reserve officials are likely to wrap up this Wednesday’s meeting signaling little to no desire to increase interest rates this year, as the central bank seeks to reduce risks in the shadow of slowing global economic growth. Fed officials were also expected to announce at this week’s meeting that they will stop reducing their $4 trillion asset portfolio.
Small Businesses Want Tax Breaks Made Permanent.
CNBC (3/18) reported that small business optimism “soared as President Donald Trump took office and began the process of overhauling” tax laws, but “in the midst of the first tax season since the law went effect, Main Street advocates are cheering parts of the overhaul but are also arguing that the law didn’t go far enough.” Small business tax breaks “aren’t permanent, and that’s made it difficult for business owners to make long-term decisions. Some would like to see Congress move to make temporary tax breaks permanent.” CNBC added, “The National Federation of Independent Business said at least 10 percent of small business owners have ranked taxes as their most important problem nearly every month since 1973 when the group began polling Main Street. In the wake of the new law, however, taxes have not taken the top spot since December 2017, being outweighed by concerned about skilled labor and government red tape.”
Labor Department: US Job Openings Rose To 7.58M In January.
The Wall Street Journal (3/15, Morath, Subscription Publication) reported the Labor Department on Friday said the number of seasonally adjusted unfilled jobs rose to a near-record 7.58 million as of the last business day of January, which was just below the 7.63 million openings in November. The Journal said this was the highest figure since at least 2000.
AOL Co-Founder Searching Middle America For Entrepreneurs.
CBS News (3/17) reported AOL co-founder Steve Case “says middle America is being ignored when it comes to venture capital investment” and he is “on a mission to discover entrepreneurs living in the Heartland.” Case and his team “are scouring the middle of the country, looking for promising ideas overlooked by Silicon Valley. They’ve traveled to 38 cities and 26 states. Thousands of miles, often spending 12 hours a day on the road.”
Media Sees Warning In Jobs Report But Also Points To Wage Growth.
“Hiring tumbled in February, with US employers adding just 20,000 jobs, the smallest monthly gain in nearly a year and a half,” the AP (3/8, Rugaber) reported, but the result “came after employers had added a blockbuster 311,000 jobs in January.” Also, the report “included several positive signs” with a 3.4 percent increase in average hourly pay “the sharpest year-over-year increase in a decade,” and unemployment fell to 3.8 percent “near the lowest level in five decades.” Still, added the AP, there are “signs that U.S. economic growth is slowing” pointing to “a weaker global economy, a trade war between the United States and China and signs of caution among American consumers.”
DARPA Reveals New Approach For Small Business Contracting.
Homeland Security Today (3/15) reported that DARPA “published a list of 10 innovation target areas it hopes to use small business contracts to address in the coming year” through the establishment of a new small business incubator program, which will utilize SBIR and STTR grant programs. The DARPA Acclerator Program “aims to mentor small businesses on how to traverse the so-called “valley of death” between lab-feasible technology and a going commercial concern,” and selected companies will also receive additional funding up to $250,000.
Survey Finds Few Small-Business Owners Concerned By Cybersecurity Risk. Wages and Benefits
Digital Transactions (3/13, Woodward) reported the recently released 2019 ControlScan/MAC SMB Payment Security Survey found that 89% of small business owners “say there is low to no risk of their businesses facing a data compromise.” Of the more than 6,500 small-business operators surveyed, only 10% “thought there was a medium risk” and 1% “said they were at high risk.” Businesses that had previously been breached were “more concerned than their counterparts about future risk,” but 44% “still view their risk as low-to-none.”
OpenX Ad Exchange Says It Will Move Identity-Based Marketing To Cloud.
MediaPost’s Digital News Daily (3/15, Sullivan) reported the ad exchange OpenX said it plans to become the first SSP – supply-side or sell-side platform – to move fully into the cloud with an identity-based targeting platform designed “to give advertisers the same experience as targeting on Facebook, but only on the open web.” The company said it has publishing test partners and will launch the services in April under “a new chief product officer from Acxiom who worked closely with Facebook.” Cloud services will be more compatible with 5G technology, OpenX said.
Mobile Device Capabilities Increasing Figuring Into Small Businesses Financial Management Strategies.
PYMNTS (3/13) reported, “Mobile devices are an increasingly important part of a small business’ financial management strategy, adding another channel on which banks and fintech must innovate to disrupt and improve SMB finances.” Small business accounting software firm BizTechnologies Vice President Ranjit Charles commented, “The younger generation of entrepreneurs who have grown up with their smartphones and payment technologies like Venmo will be looking for similar capabilities in the business.”
SCORE Mentor Discusses Small Business Cash Flow.
Certified SCORE mentor Dean Swanson wrote in his Rochester (MN) Post-Bulletin (3/6) column, “If there is one financial challenge that small business owners should master, it’s cash flow. Your business could have strong sales, healthy profit margins and a growing customer base – but a negative cash flow could sink you. More than 80 percent of failed small businesses experience cash flow problems.” Swanson offered “suggestions on how to maximize your monthly cash flow,” and wrote that SBA loans “often come with more stipulations than bank loans. However, the terms of these loans are generally favorable to small business owners.”
Gewirtz: Cloud Cost Control Challenge For Small Businesses.
ZDNet’s (3/5) David Gewirtz explained how cloud cost control can be a challenge for small businesses and freelancers. He writes, “Back in 2017, I talked about how many of the unlimited cloud storage providers were setting limits. Even Amazon had an unlimited cloud storage plan that suddenly increased in price.” He continued, “I have 15 terabytes in Google Drive. Moving that would take months. It’s far easier for me to pony up the extra ten bucks a month than undertake a half-year long migration process.” It’s “that trap that most small business owners will experience.” Gewirtz said that the main challenges are: “price increases out of our control, renewal surge pricing that may come as a surprise, and lock-in in the form of the level of difficulty it takes to move to another provider.” Giving up control “over IT to service providers does come at a price.”
Hotel Industry Grapples With Minimum-Wage Hikes.
Hotel Management (3/14) reported, “the federal minimum wage in the U.S. is $7.25 an hour,” however, “29 states and the District of Columbia pay a minimum wage that is higher than the federal one.” According to Hotel Management, “hoteliers are wondering how these increases will impact the overall industry and their ability to pay their employees – or even keep their doors open.” The “Illinois Hotel & Lodging Association voiced its opposition to one such minimum-wage increase in February.” Meanwhile, labor union Unite Here, which has “more than 265,000 active members, successfully organized a series of strikes against multiple Marriott International hotels in 2018.”
National Restaurant Association Opposed Bill To Raise Federal Minimum Wage.
Restaurant Dive (3/7, Kelso) reported, “The National Restaurant Association came out against H.R. 582, or the ‘Raise the Wage Act’,” which would increase the federal minimum wage to $15 per hour over the next five years. The NRA argues that “the bill would suppress new job creation in the restaurant industry” and “impose undue harm on small business owners.” However, “the tide on this issue is clearly changing,” with voters in deep red states like Arkansas and Missouri approving increases. However, “as restaurant operators continuously navigate headwinds like food and technology costs, labor is the number one cost for restaurants.” Still, the main concerns from when the push for a $15 an hour minimum wage began in 2012, – “mass closures and position eliminations – haven’t really materialized,” as restaurants “figured out how to better navigate added labor pressures, incorporating efficient technologies, trimming bloated G&A expenses, refranchising and for some, increasing some menu pricing.”
Tipping Practices Evolving With Rise Of $15 Minimum Wage.
The Wall Street Journal (2/26, Kadet, Subscription Publication) reported that with the $15 per hour minimum wage becoming more common throughout the country, food service employees and drivers are seeing smaller tips.
Worker Benefits, Wages Have Been Decreasing Despite Low Unemployment.
The Wall Street Journal (2/23, Kiernan, Subscription Publication) reported that despite low levels of US unemployment, worker benefits and wages decreased, as a percentage of gross domestic income, to 52.7 percent during the third quarter of last year, which was the fourth consecutive quarterly decrease, according to Bureau of Economic Analysis data.
WPost Criticizes Democratic Plan To Boost Social Security Benefits And Raise Taxes On Wealthy.
The Washington Post (2/21) in an editorial criticized the Social Security 2100 Act, a Democratic proposal for reforming Social Security, saying that while Social Security does need “a fix,” it “is not broken – and does not require a radical overhaul.” The Democratic plan would increase benefits, and pay for them “by a gradual increase in payroll taxes” and by “applying Social Security taxes to wage income above $400,000 per year.” The Post favored an alternative Social Security plan that would maintain full benefits “for the 30 percent of workers with the lowest lifetime earnings, while reducing the growth rate” for everyone else.
Wage Gains For Job Switchers Are Highest Since October 2007.
Bloomberg News (2/13, Tanzi) reported that people switching jobs are benefiting from the strong labor market. According to the Federal Reserve Bank of Atlanta’s Wage Growth Tracker, “median wage growth for those who jumped to new positions picked up to 4.6 percent in January from a year earlier, the fastest pace since October 2007. That compared with 3.4 percent for those who haven’t switched jobs, though that measure was down from a 10-year high of 3.9 percent reached in November.”